Friday, April 16, 1999 Published at 15:56 GMT 16:56 UKSci/TechSega Dreamcast to spark price warThis racing game, working title Metropolis, is being developed for Dreamcast's European launchSega's next-generation games console, Dreamcast, will cost £199 in the UK when it is launched on 23 September, 1999.

This will be the lowest-ever launch price for new games technology and the prices of other consoles are expected to drop.

In the US, Dreamcast will ship on 9 September, 1999, and cost $199. In Japan, one million consoles have been sold in four months.

Sega claim the 128-bit Dreamcast will be the most powerful video game console ever created, with four times the graphics processing power of the fastest Pentium II processor.

Dreamcast uses Sega's own type of DVD-like disk

It will also be the first console to offer in-built Internet capability. Sega say that in the future, the modem will allow consumers to play games over the Internet and give them access to e-mail, chat and Web browsing.

However, the market leader Sony are set to cut the price of their Playstations to £69 in response. This would be a loss leader, but the bulk of Playstation profits come from software.

The games market in the UK alone is worth £1.5bn a year, with over 66% of UK homes having a games machine.

Home fitting

"The big problem for Dreamcast is that the installed user base of Playstation is now so big that Playstation is actually considered as much a part of the home as a video recorder," says James Snodgrass, deputy editor of gadget magazine Stuff.

"There are huge technical advances in Dreamcast but Playstations are still selling, and selling in big numbers, even though they have been out for nearly four years," he told BBC News Online.

Sony's new system, Playstation 2000, will not be available until Christmas 2000. There have been strong industry rumours that a third party has developed an Internet capability compatible with the Sony Playstation.

Hard-core gamers have already found unofficial ways of using the Playstation over the Net.

But Mr Snodgrass thinks one of the best features of Dreamcast, will not be pushed as a selling point in the UK. The Visual Memory Unit is a small card which can carry a gamer's best moves from one console to another and also to Sega's new arcade machines, Naomi.

"But Sega in this country don't think there is enough of an arcade culture," he says.

Already here

He also told BBC News Online that there is a significant number of "grey import" Dreamcast consoles from Japan already in the UK. Gamers use computer consoles to avoid the problem of the different television standard used in Japan.

Dreamcast will launch in Europe with 10 game titles including titles from Japan such as "Sonic Adventure" and "Virtua Fighter 3tb". Twenty more are expected by Christmas, including "Sega Rally 2", "House of the Dead 2" and a game with the working title "Cool Boarders Dreamcast".

Sega Europe has earmarked a £60m marketing budget for the first year alone. In the US, the figure is $100m.